Could the Prime Minister’s fledgling Brexit plan end this paralysing uncertainty?
“Unrealistic and damaging proposals”, or a “genuine attempt to bridge the chasm”?
That was the debate raging in parliament yesterday, as the Prime Minister briefed MPs on his new plan for a Brexit deal.
The reaction to Boris Johnson’s innovative attempt to break the Brexit deadlock has been mixed. Labour and the Liberal Democrats have been quick to dismiss the plans, arguing that additional border infrastructure both in the Irish Sea and on the island of Ireland would risk damaging the economy and undermining the principles of the Good Friday Agreement.
But it is hardly news that opposition parties oppose the government. More interesting has been the tentative support offered by Conservative MPs across the Brexit spectrum, the DUP, and some Labour rebels who have made clear that their priority is a deal – all of which combined could suggest scope for a narrow majority.
This is crucial, because other news this week demonstrates the danger of continuing the impasse. The latest reading of the purchasing managers’ index (PMI) – a closely-watched industry barometer – released yesterday rang alarm bells, dropping to a six-month low. As Capital Economics’ chief economist noted, this “means that all three sector PMIs are now below the 50-mark which theoretically separates expansion from contraction, reigniting concerns that the economy is in recession”.
PMI figures have been wrong before, notably indicating more of a downturn after the 2016 referendum than actually happened. And they are tempered by today’s report from business advisory group Eight International, which notes that the UK continues to rank highly in terms of its favourable business environment. Clearly, Britain’s fundamentals remain strong.
Nonetheless, the situation is delicate, and while commentators should resist the urge to blame any bad news on Brexit, the fact remains that a clear route forwards would go a long way to bolstering business and consumer confidence, and enable companies to make investments which they have been delaying while the uncertainty continues.
We cannot guess the fate of the Prime Minister’s fledgling plan. Some EU leaders have raised predictable objections, but others have expressed willingness to use this as a starting point for a new deal.
If the EU engages in good faith and a deal is brought back before parliament, sceptical MPs might take a moment to consider the fragility of the current economic situation before writing off what could be the best chance of establishing some kind of certainty.
Main image credit: Getty